Brazil Economy 1997

Economy - overview Possessing large and well-developed agricultural, mining, manufacturing,and service sectors, Brazil's economy outweighs that of all other South Americancountries and is expanding its presence in world markets. Prior to the institutionof a stabilization plan - the Plano Real (Real Plan) - in mid-1994, stratosphericinflation rates had disrupted economic activity and discouraged foreign investment.Since then, tight monetary policy has brought inflation under control - consumerprices increased by only 10% in 1996 compared to more than 1,000% in 1994.At the same time, GDP growth slowed from 5.7% in 1994 to 2.9% in 1996 dueto tighter credit. The steadily appreciating currency has also encouragedimports, contributing to a growing trade deficit, and depressed export growth.Brazil's more stable economy allowed it to weather the fallout in 1995 fromthe Mexican peso crisis relatively well, and record levels of foreign investmenthave since flowed in, helping to swell official foreign exchange reservesto $60 billion in 1996; stock markets reflected this increased investor confidence,gaining 53% in dollar terms. President CARDOSO remains committed to furtherreducing inflation in 1997 and putting Brazil on track for expanded economicgrowth, but he faces several key challenges. Fiscal reforms requiring constitutionalamendments are stalled in the Brazilian legislature; in their absence, thegovernment is continuing to run deficits and has limited room to relax itsinterest and exchange rate policies much if it wants to keep inflation undercontrol. High interest rates have made servicing domestic debt dramaticallymore burdensome for both public and private sector entities, contributingto federal and state budget problems and a surge in bankruptcies.

GDP purchasing power parity - $1.022 trillion (1996 est.)

GDP - real growth rate 2.9% (1996 est.)

GDP - per capita purchasing power parity - $6,300 (1996 est.)

GDP - composition by sector
agriculture: 13%
industry: 38%
services: 49% (1995)

Inflation rate - consumer price index 10% (1996)

Labor force
total: 57 million (1989 est.)
by occupation: services 42%, agriculture 31%, industry 27%

Unemployment rate 5.2% (1996 est.)

Budget
revenues: $86 billion
expenditures: $90 billion, including capital expenditures of $NA (1995)

Industries textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft,motor vehicles and parts, other machinery and equipment

Industrial production growth rate 3.5% (1995 est.)

Electricity - capacity 59.036 million kW (1995)

Electricity - production 268.874 billion kWh (1995)
note: imports some electricity from Paraguay

Electricity - consumption per capita 1,572 kWh (1995 est.)

Agriculture - products coffee, soybeans, wheat, rice, corn, sugarcane, cocoa, citrus; beef

Exports
total value: $47.7 billion (f.o.b., 1996)
commodities: iron ore, soybean bran, orange juice, footwear, coffee, motor vehicleparts
partners: EU 26%, Latin America 22%, US 23%, Argentina 11% (1995)

Imports
total value: $53.3 billion (f.o.b., 1996)
commodities: crude oil, capital goods, chemical products, foodstuffs, coal
partners : EU 26%, US 24%, Argentina 11%, Japan 5% (1995)

Debt - external $176 billion (December 1996)

Economic aid
recipient : ODA, $107 million (1993)

Currency 1 real (R$) = 100 centavos

Exchange rates R$ per US$1 - 1.043 (January 1997), 1.005 (1996), 0.918 (1995), 0.639(1994); CR$ per US$1 - 390.845 (January 1994), 88.449 (1993), 4.513 (1992)
note: on 1 August 1993 the cruzeiro real (CR$), equal to 1,000 cruzeiros,was introduced; another new currency, the real (R$) was introduced on 1 July1994, equal to 2,750 cruzeiro reais

Fiscal year calendar year

NOTE: The information regarding Brazil on this page is re-published from the 1997 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Brazil Economy 1997 information contained here. All suggestions for corrections of any errors about Brazil Economy 1997 should be addressed to the CIA.